Greenfield investments, economic complexity, and financial inclusion-environmental quality nexus in BRICS Countries: Does renewable energy transition matter?

Abstract

An accurate environmental quality assessment is crucial to create an effective climate framework to combat environmental problems. A pertinent climate purpose is being offered based on greenfield investment and financial inclusion to support the energy transition, especially in light of the most recent conference on climate change (COP27). The study employed batteries of techniques to investigate the drivers of carbon footprint in BRICS nations from 2003 to 2018. The results demonstrate that the carbon footprint and its drivers have long-term co-integration linkages. The results of the Pooled Mean Group (PMG) show that, urbanization, greenfield investments and economic complexity represent a constraint to the transition to renewable energy. On the one hand, it is reflected in its positive contribution to enhancing the carbon footprint. Moreover, urbanization has assisted in encouraging renewable energy sources. Based on these findings, it is proposed that the industrial sector takes a more active role in economic complexity to strengthen the BRICS countries' potential for renewable energy and that more investment is made in clean and renewable energy sources.